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  • Writer's pictureQC Verify

What Will Your Investors Look For During The Next Audit?

Quality Mortgage Services (QMS) has found that in many scenarios investors are looking beyond the loans you deliver to them, not simply in scope but in actual loan files. The premise is that investors want to ensure the full breadth of your quality control (QC) program is compliant and executed consistently throughout the organization.This means file sampling for investor audits may in fact include loan files, appraisals, reverifications, or post-closing credit reports from loans that were sold to other investors.

This change in approach can obviously have an impact on your audit findings, as most lending institutions typically follow guidelines that are specific to the end investor.Albeit there is generally some overlay of institutional or industry requirements, but rarely an exact matchup.Variances at time of underwriting, or even pre-funding, may be minimal in order to avoid warehouse line and funding risk; however, when it comes to post-closing QC the difference in investor requirements can be numerous.For example, an updated credit report may only be required on files not underwritten through an investor automated underwriting system (AUS), or files with credit scores under 720, or else you may need an in-file report versus a full Residential Mortgage Credit Report (RMCR), based on loan criteria.

Managing appraisal review requirements from one investor to another can also be an onerous task.There can be variances in sampling and review requirements in terms of criteria, as well as frequency, for use of field reviews, desk reviews, and automated valuation models (AVMs), to verify property eligibility.In some reported instances investors have asked to see an entire lender loan sampling, regardless of investor, to determine the overall quality and consistency of appraisal oversight.

Under these probable circumstances, even minor investor variances could lead to negative findings on a crucial audit report, or worse.Tracking to this level of detail is tedious and not necessarily within the bandwidth of inhouse QC teams.Quality Mortgage Services, QMS, offers several options in this area.Lending institutions can obviously outsource QC responsibilities to QMS as a preferred QC provider; where superior industry expertise and technical innovation have been the focus for several decades.Most recently, QMS announced significant enhancements to their MARS, Mortgage Analyst Review Software. The latest version of MARS is designed to help overcome this type of industry compliance obstacle, delivering breakthrough automation that addresses the entire QC audit process, adding greater visibility into meaningful audit data, more sophisticated analytics, setup tools and navigational access, all of which create efficiency where lending institutions need it most, in quality control and risk management.To learn more about industry nuances in QC, how QMS can support today’s QC issues, and the full range of MARS benefits, visit us today at and learn how innovation can empower your internal QC processes with QMS.

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